Debenhams could go into administration within days as part of a major restructuring plan that will see it fall into the hands of its lenders and wipe out Mike Ashley's shareholding.
The department store group has given the Sports Direct tycoon just over a week to put his money where his mouth is by either making a firm takeover offer or providing an alternative funding package.
Debenhams gets green light for £200 million refinancing that could wipe out shareholders
On Friday, Debenhams confirmed it has put in place a £200 million refinancing plan, of which £101 million will be drawn down immediately.
The retailer said this would allow it to begin a restructuring process involving store closures and rent reductions.
The other £99 million will only be made available if Sports Direct - or any other shareholder with a stake of more than 25% - fulfils one of two conditions by April 8.
Under one option, Ashley can make a takeover offer which includes arrangements to refinance the group's debt.
Alternatively, he can call off the emergency meeting he has requested to install himself on the retailer's board and commit to either providing funding for the business or underwriting the issue of new shares.
If neither course of action is taken by the deadline, the company will go into a pre-pack administration, handing control to its lenders and wiping out shareholders, including Ashley's near 30% stake.
This would then allow for the transfer of the £99 million to the company under its new ownership. Debenhams added that it will be contacting Ashley to gauge his interest.
Debenhams chairman Terry Duddy said: "We will now move to the next phase of the restructuring of the business, which includes reducing rents and reshaping our store portfolio, as we have referenced in previous announcements.
Debenhams hands Mike Ashley deadline of April 22 to make takeover bid
"These actions are necessary to ensure the strongest possible platform to support the business going forward."
Earlier on Friday, Ashley lashed out at advisers to Debenhams after his takeover approach was snubbed.
Only on Wednesday, Mr Ashley, through Sports Direct, said he was considering tabling an offer for Debenhams which would value it at £61.4 million. But Debenhams has consistently resisted overtures from the tycoon.
